The city of Milwaukee is considering a $3.5 million tax incremental financing package to boost Midtown Center on the city’s northwest side.

The fund would provide money for developer incentives and center improvements in the already existing TIF district on the 56-acre site at North 60th Street and West Capitol Drive.

Midtown is the largest shopping center in the city of Milwaukee at 454,000 square feet. It was built as an open-air shopping center at the former Capitol Court, which closed in 2001. It has been popular with neighborhood residents but has faced some vacancies during the recession.

Lowe’s Cos. Inc. closed its 150,000-square-foot store in 2009, and the building has been vacant since then. A developer from Illinois was recently interested in turning the site into a multi-tenant retail space, but that deal has fallen through, said Teresa Shemitis, vice president at Mid-America Real Estate-Wisconsin LLC. Mid-America is handling leasing at the center.

The site of a former Applebee’s at the center also remains vacant, and Marshalls closed its 25,000-square-foot store in late 2012.

Most of the property is owned by Retail Properties of America Inc., formerly Inland Western Real Estate Investment Trust. The vacancy rate at the center is about 13 percent, according to the TIF proposal, but Shemitis said the vacancy rate in the Retail Properties-owned portion is about 10 percent.

The TIF district was created in 2000 to help with the redevelopment of the center. The center has received $11.7 million in TIF financing and contributed $14 million in incremental revenue, for a $2.3 million surplus. The TIF proposal would extend the life of the district to 2015. The package would reach $3.7 million including interest and other costs.

According to the proposal, the money would help add new retail to the center, ensure it remains vibrant and create new jobs. The center currently employs 700 to 800 people, including employees of the Walmart and Pick ’n Save stores on the site.

The Milwaukee Redevelopment Authority will consider the proposal Thursday. It also must be approved by the Common Council and a joint review board.

Associate Editor Stacy Vogel Davis covers retail and tourism for the Milwaukee Business Journal. She also covers restaurant news through her Table Talk blog on The Business Journal website and column in the weekly edition.

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